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Chang and Carlin, LLP Bankruptcy Blog
Learn more about Chapter 7 and Chapter 13 bankruptcy in Illinois as well as helpful tips on how to get out of debt, manage your finances, and general legal information related to bankruptcy and how it may impact you, your family, and your financial future.
If you’re evaluating your financial status and considering bankruptcy, making a list of Chapter 7 Bankruptcy pros and cons can help you mull over your options. In a Chapter 7 Bankruptcy a debtor actually has a number of opportunities, though the advantages may come at a cost, depending on the situation and the skill of your attorney.
What does bankruptcy mean for you and your family’s financial future? Check out the rest of this post and consider contacting an attorney to further outline the benefits and challenges unique to your situation.
What are the Most Important Chapter 7 Bankruptcy Pros and Cons?
Chapter 7 Bankruptcy Benefits:
Eliminate Debt: Filing a Chapter 7 Bankruptcy puts you in control of your future financial security. A discharge can take care of money owed on credit cards, medical bills, personal unsecured loans and many other types of unsecured debt.
Help with Crippling Medical Bills: People who've experienced an illness or injury and found themselves buried in bills (even if they have health insurance) may consider filing for Chapter 7 Bankruptcy as a way to get out of debt. A recent study by Professor Elizabeth Warren of Harvard Law School found that over half of all bankruptcies are related to illness, and 75% of those people who end up filing because of medical bills have health insurance. If you do not have insurance and are overcome with medical bills, Chapter 7 can help you eliminate those debts.
Stop Harassing Behavior from Creditors and Collection Agencies: According to the Federal Trade Commission, Federal law dictates how and when a debt collector may contact you: not before 8 a.m., after 9 p.m., or while you’re at work if the collector knows that your employer doesn’t approve of the calls. Collectors may not harass you, lie, or use unfair practices when they try to collect a debt. And they must honor a written request from you to stop further contact. And this is before you file!! The minute you file bankruptcy, the Bankruptcy Court issues an order telling all of your creditors to leave you alone. No more phone calls. No more collection letters. No more lawsuits. No garnishments. No repossessions. No foreclosures. Nothing.
Bankruptcy is Not a Reason to be Fired: What does bankruptcy mean for your work status? In a Chapter 7 bankruptcy a debtor may fear for their job safety if their bankruptcy filing is discovered at work. However, you cannot be fired from your job solely because you filed for bankruptcy.
No Repayment Necessary: In a Chapter 7 Bankruptcy, if the new bankruptcy laws are complied with, then you aren’t required to offer a monthly repayment to your creditors. This is especially beneficial if you are currently unemployed or have minimal disposable income.
Get Your Driver’s License Back: Chapter 7 Bankruptcy helps you keep or regain your driver’s license subject to revocation because of an unpaid accident judgment, which may mean employment and income for your family.
Chapter 7 Bankruptcy Limitations
Credit Hit: Bankruptcy information (both the date of the filing and the later date of discharge) stay on a credit report for 10 years and can make it difficult to get credit, buy a home, get life insurance, or sometimes get a job.
Liquidation: A bankruptcy trustee can liquidate your unprotected assets to pay part of your bills. Luckily, Illinois law provides a number of exemptions, and most people who file for Chapter 7 Bankruptcy don’t have unprotected assets. A Chapter 7 attorney can help you determine if your assets are protected by these exemptions.
Non-Dischargeable Debts: You may not be able to discharge certain debts, including child support, student loans and most types of tax related debt. You’d need to check with an attorney to discover which debts are exempt.
Liens: Liens such as your mortgage are not automatically discharged. If you want to continue to own your home or car, you will need to continue making payments. However, an attorney can help negotiate a reaffirmation agreement with your lien holders where you continue to make payments in exchange for keeping your property.
What Does Bankruptcy Mean for You?
Every situation is different, and these Chapter 7 Bankruptcy pros and cons may resonate differently depending on your circumstances. Let us help you determine what your options are and create a road map to help you get out of debt. Request a Free Chapter 7 Consultation Today. Our goal at Chang and Carlin, LLP is to change your financial future!
DISCLAIMER: All information on this website are provided for informational purposes only and are not intended to be construed as legal advice. Chang and Carlin, LLP shall not be liable for any errors or inaccuracies contained herein, or any actions taken in reliance thereon.
It was recently announced that foreclosure settlement checks would be sent to millions of homeowners in American to compensate them for their foreclosures. These checks are an attempt to rectify what many believe to be dishonest practices by mortgage loan servicing companies. Those receiving checks were sent foreclosure notifications in 2009 and 2010.
As foreclosure settlement checks began to arrive many recipients were underwhelmed by the amount they were given. According to an article in The Huffington Post, one big issue with the foreclosure settlement checks is that they are being awarded to everyone who received a foreclosure notice in 2009 and 2010. Even though some of these people were foreclosed on for good reason. The reason for the major disappointment is that in advance of sending the checks people were provided with a chart that would help them determine the size of their foreclosure settlement checks. The chart titled, Independent Foreclosure Payment Agreement Details allowed homeowners to get an exact number that they were expecting from the payout and as checks arrive it’s becoming obvious that the expectations made from the chart are not becoming a reality.
The Huffington Post article goes on to explain the process of awarding these checks and how things went wrong:
"To some degree, the checks represent a math problem. In crafting the deal, regulators at the Office of the Comptroller of the Currency and the Federal Reserve determined that all 4.4. million people who received a foreclosure notice in 2009 or 2010 would receive a payout, regardless of whether they suffered any harm. If the $3.6 billion allocated to these homeowners was evenly allocated, everyone would receive a check for a bit more than $800.
Yet regulators also wanted to deal out more money for people who suffered the most obvious harm. Eventually, they created 11 categories. A "completed foreclosure" of a borrower protected by bankruptcy law, for example, would yield at minimum a $31,250 payout. Others would receive just $300.
Borrowers who previously applied to the foreclosure review would typically see their payout double, according to the chart.
Given the well-documented complaints that homeowners have made for years about how their bank or mortgage "servicer" managed their loan account, it's probably not surprising that many would find their payout amount unsatisfying. When the payout plans were announced last year, many felt the expected recompense figures were paltry compared to the injustice they had suffered.
Now, many borrowers are saying that they've gotten less than what they should have received -- based not simply on their own sense of injustice, but on their understanding of the payment chart. They said they were especially frustrated that their check came with no explanation of how their payout was calculated."
Ultimately foreclosure settlement checks should be a good thing. Unfortunately after getting their hopes up, many were left disappointed after receiving their payment.
These foreclosure settlement checks are not for anyone who is facing foreclosure today. If you've been struggling to make mortgage payments it may be time to talk to a foreclosure attorney in Chicago about the options available to you. Schedule a free legal consultation with Chang and Carlin today!
DISCLAIMER: All information on this website are provided for informational purposes only and are not intended to be construed as legal advice. Chang and Carlin, LLP shall not be liable for any errors or inaccuracies contained herein, or any actions taken in reliance thereon.
Today we’ll be covering what you need to know about bankruptcy and debt in general if you are having a tough time financially. If you’re struggling with constant creditor harassment and mounting debt and can’t envision a way out, check out the rest of this post. We’ll cover a few topics to give you a better idea about how the law and system works.
What to Know About Bankruptcy if You’re in Dept
End Your Chapter 13 Payments With A Hardship Discharge Chapter 13 Bankruptcy is a great way to get out of debt while holding on to you assets at the same time. Typically, you’re required to make payments to your creditors for a period of 3-5 years before you discharge your remaining debts.
However, sometimes people run into major life changes that affect their income, such as a lost job or a death in the family. In order to initially qualify for Chapter 13 you must show proof of steady income. Should you lose that income, you’d likely be unable to continue those 3-5 years of payments.
Luckily, you still have options. When this happens you can petition for a hardship discharge, which means that a major financial hardship has rendered you unable to continue payments. If your hardship petition qualifies and you have made payments equivalent to what your creditors would receive through a Chapter 7 filing, you are likely to be discharged of your remaining debt.
If the court feels that you do not qualify for a hardship discharge, you may still be able to get a modification to your agreement, such as decreased payments.
Fair Debt Collection Practices Act (FDCPA): Top 6 Issues Covered
According to the Federal Trade Commission, the FDCPA,
"…prohibits debt collectors from using abusive, unfair or deceptive practices to collect from you."
The FDCPA covers personal debt. This includes credit cards, mortgages, auto loans, etc. However, it does not include business debt.
Hours. Under the FDCPA, debt collectors can't contact you in the early morning or late evening. They also cannot contact you at work if you have previously indicated that you may not receive phone calls there.
Behaviors not appropriate when trying to collect debt. A few examples of this "off-limits" behavior are harassment, making false statements and unfair practices.
You have options if you believe your rights have been violated. The Fair Debt Collection practices act gives you recourse - you may sue a debt collector or file a complaint with the Attorney General's office.
Threatening arrest or legal action. Collection agencies may not threaten legal action which is either not permitted or not actually contemplated.
Abusive or profane language. Abusive language cannot be used in the course of communication related to the debt.
Chapter 7 Bankruptcy Exemptions - Understand What You Can Keep
As opposed to Chapter 13 Bankruptcy, where a payment plan is arranged, when someone files Chapter 7 Bankruptcy they will do so knowing that many of their assets will be liquidated. The cash from the liquidation will be used to make payments to creditors.
However, there are several possible exemptions allowed with Chapter 7 Bankruptcy. The following is what you can keep:
A homestead exemption may allow you to keep some of the equity in your home
A minimum of 75% of wages
Approximately $17,000 of equity in their home
Cash from any insurance policies
Federal exemptions: survivor, disability, lighthouse worker's and miscellaneous benefits
Pensions and retirement benefits
Social security benefits
Tools used for your job
Up to $1,000 worth of personal jewelry
Discharging Student Loans in Bankruptcy
Finally, getting back to the ‘hardship discharge’ mentioned above, if you hope to discharge student loans in bankruptcy, you must show the court "undue hardship". In order to establish this, many Courts have followed the Brunner test, which outlines what to know about bankruptcy and student loans.
Based on legislative history and the decisions of other district and bankruptcy courts, the district court adopted a standard for "undue hardship" requiring a three-part showing:
Poverty. Based upon your current income and expenses, you cannot maintain a minimal standard of living for yourself and your dependents if you are forced to repay your loans.
Persistence. Your current financial situation is likely to continue for a significant part of the repayment period.
Good faith. You have made a good faith effort to repay your student loans.
Facing Chapter 7 or Chapter 13 Bankruptcy? Get Help Today!
Going up against creditors and filing for bankruptcy can be a daunting and scary process, but you don't have to deal with this alone. An attorney at Chang and Carlin, LLP understands what you need to know about bankruptcy and can help you get the legal representation you need.
DISCLAIMER: All information on this website are provided for informational purposes only and are not intended to be construed as legal advice. Chang and Carlin, LLP shall not be liable for any errors or inaccuracies contained herein, or any actions taken in reliance thereon.
According to a recent report by the Chicago Tribune the number of homeowners that currently owe more on their mortgage than their home is valued at has decreased. When a homeowner is in this situation they are often referred to as being “under water” or “upside down” in their home. The trend of becoming upside down in a mortgage has forced some debtors into strategic default.
What is strategic default?
Strategic default is when a homeowner makes the decision to stop making payments towards a house because it no longer makes financial sense to do so. This is because the home is valued at less than they owe to a creditor. It is impossible for these homeowners to sell and get out from under the debt of their home because the sale price would not be enough to pay off the creditor. After evaluating the value of their home some homeowners have opted to stop paying the mortgage as a solution to the problem. Strategic default may work for some homeowners but others may find they are faced with more legal issues because of their actions. Creditors may still try to collect the money that is owed to them in the contract of the home purchase agreement.
The Chicago Tribune’s report that fewer Americans are in this position of owing more on their mortgage than their house is worth is good news for the real estate market and the economy.
“Fewer borrowers nationwide owe more on their mortgages than their homes are worth, providing a boost to the housing recovery, according to a new report.
Roughly 200,000 borrowers escaped their “negative equity” positions during the final three months of last year, said real estate data provider CoreLogic. During all of last year, 1.7 million residential properties moved from negative to positive equity.
Overall, the nation’s negative equity fell from $670 billion in the third quarter to $628 billion at the end of last year, CoreLogic of Irvine said Tuesday.”
The article in the Chicago Tribune goes on to say that the rise in property values could also be attributed to the fact that real estate inventory is very low right now. Due to the competition among buyers some believe the price of real estate is being driven higher.
As more homeowners get out from underwater and into a position where they can sell their house the real estate market may see an increase in inventory. When inventory is plentiful the power will likely shift back to the buyers. Time will tell if a boost in real estate listings causes prices to drop or flat line or if the real estate market will continue to improve.
If your home is currently worth less than you owe to your mortgage company contact a foreclosure attorney in Chicago to help determine the options available to you. Strategic default is a decision that can have major legal repercussions. Get the facts from a professional before making any permanent decisions.
DISCLAIMER: All information on this website are provided for informational purposes only and are not intended to be construed as legal advice. Chang and Carlin, LLP shall not be liable for any errors or inaccuracies contained herein, or any actions taken in reliance thereon.
How do you find out who is garnishing your wages? This is a question many people who’ve noticed their paycheck was running a bit low want to know, as the discrepancy in earnings may stem from wage garnishment from creditors or the IRS. If you’ve been struggling with debt, your creditors may have resorted to automatically deducting a percentage of your earnings from your paycheck.
While you’ll have already received notice in many cases, there are certain instances where the garnishment may come as a surprise. This is why it is important to find out who is garnishing your wages.
Most Creditors Need a Court Order to Garnish Your Wages
Unless you owe child support, back taxes, or student loans, your creditors, those to whom you owe money, cannot garnish your wages unless they first get a court order. For example, if you have defaulted on a loan, stopped paying your credit card bill, or have run up huge medical bills, your creditors can't just start garnishing your wages. They must first sue you, win, and get a court order requiring you to pay what you owe.
Child Support and Alimony: Since 1988, all child support or alimony orders automatically include a wage withholding order. This means that if you are ordered to pay child support, your wages may be garnished without additional court action.
Unpaid Income Taxes: If you owe back taxes to the IRS or your state and local governments, your wages can be garnished without having to obtain a court order against you. Just how much they can garnish depends on the number of dependents you have, your deduction amounts, and state law regarding wage garnishment limits.
Student Loans: If you are behind on your federal student loan payments, the U.S. Department of Education (or any entity collecting on its behalf) can garnish your wages without a court order, which is referred to as administrative garnishment.
So How Do You Find Out Who Is Garnishing Your Wages?
Here are a few steps to take to discover who is garnishing your wages:
If your paycheck is lower than usual and you suspect wage garnishment, look for "Other" or "Miscellaneous" deductions to find out whether your wages are being garnished. If you have been involved in a debt-collection lawsuit recently, or you owe the IRS money, they’re likely collecting the money due.
Since your employer is required to provide you with a copy of garnishment paperwork, you should ask the payroll department at your job. If they are taking money out of your paycheck, they should give you a copy of the documents.
Check back through any past correspondence with creditors. You may find a reference to wage garnishment which was overlooked.
You should also request a credit report as soon as possible from all credit reporting agencies right away.
Contact the Internal Revenue Service to find out whether your wages are being garnished. You should have received a garnishment notice from them.
Differing State Laws
Garnishment policies vary from state to state and bank to bank, so it is also important to understand your state's laws on the matter. In a recent creditcards.com article, Gail Cunningham, senior director of public relations at the National Foundation for Credit Counseling adds,
"There are some states in which garnishment is approved, and clients should be aware if their debt occurred in a garnishment state or a state wherein garnishment is prohibited. And, although credit card debt is often sold to a third-party collector, it can be -- and often is -- subject to wage garnishment."
Furthermore, wage garnishment is allowed in all states for unpaid taxes and child support.
Are Your Wages Being Garnished? Get Help Today!
Going up against creditors can be a daunting and scary process, but you don't have to deal with this alone. An attorney at Chang and Carlin, LLP can help you get the legal representation you need.
DISCLAIMER: All information on this website are provided for informational purposes only and are not intended to be construed as legal advice. Chang and Carlin, LLP shall not be liable for any errors or inaccuracies contained herein, or any actions taken in reliance thereon.
In this post, we’ll look at a few real estate interview questions and answers from various real estate experts. This will give you a chance to get some solutions to real-world problems in a few different aspects of real estate law. Topics cover homeowners associations, elder issues, selling your apartment, Chicago real estate developments, and hiring an agent. All topics are excerpts, so check out the full posts for a more detailed look at each subject.
Real Estate Interview Questions and Answers: 5 Topics
This short post asks Florida attorney Gary M. Singer about how to deal with homeowner’s association issues.
Q: We live in a community governed by a homeowner’s association. Our board is gradually ignoring more and more of our bylaws, causing the quality and appearance of the community to decline. What can I do?
A: Whether a co-op, condo or a homeowner’s association, community associations all have rules that control them. They are governed both by state law and by their own internal bylaws. Community association board members are elected by the property owners living in the community. The best thing that you can do to fix your situation is to get elected to the board of directors.
Deborah Herzel is a staff attorney with Senior Citizens Information and Referral Service (SCIRS), which provides information about services for people age 60+ and those with disabilities who live in Knoxville or Knox County. This question and answer session focus primarily on senior financial and legal concerns. Here is an excerpt:
Q: Have the key elder issues altered in the past 5-10 years?
A: There are not enough affordable options to meet the needs of older adults who do not need nursing home care, but do need assistance at home or in an affordable assisted living facility. In addition, while the downturn in the economy has affected everyone, every catastrophe creates an opportunity for people who are unscrupulous; so seniors were particularly hard hit by mortgage-lending abuses. Many people who worked hard to pay off their homes fell victim to con artists who convinced them to take out a mortgage to pay off credit cards or other unsecured debt; and in many cases the terms of those mortgages were misrepresented. We see a lot of seniors who are facing foreclosure because they got adjustable rate mortgages with artificially low starting rates or loans with balloon payments they couldn’t pay.
This article shares a NY Times interview with Alan Kazlow, a Manhattan real estate lawyer. The questions bounce around through a number of real estate topics.
Q: Does a seller have the right to interview people making an offer on his apartment, including questions about income, finances and credit history, before accepting or rejecting an offer?
A: There is no restriction on a seller conducting an in-depth interview of a prospective purchaser. Most often, though, and more desirable, would be for the seller’s broker to ascertain the income, employment, financial, family and other important information regarding the buyer’s qualifications and background. While such an interview is not typical, it may be justified considering the time and expense involved in hiring a lawyer, negotiating a contract and the potential adverse change in market value should the sale be lost because of board rejection or financing contingency.
This Curbed Chicago interview excerpt with @properties' Peter Olesker looks at a number of different aspects of Chicagoland real-estate, and may be of particular interest to Windy City residents.
Q: Rental construction is booming downtown. Small neighborhood condo projects are back in action. And sales in existing buildings seem to be doing better than a year ago. What do the numbers say about these trends' staying power, and when is the industry expecting to see large scale condo construction again?
A: We just completed a comprehensive study on condo-sales activity in downtown Chicago, and our outlook for the for-sale market is very positive. Last year the number of home sales citywide was up about 20% from 2011, but sales of condos in the core downtown neighborhoods jumped by more than one-third. We saw solid gains on a price-per-square-foot basis in Streeterville, River North, the Loop, the West Loop and even the South Loop. I think we'd be looking at even better numbers if we had the inventory, but in the West Loop for example, in the month of February, there was only a 45-day supply. Two years ago there was 16.5 months. On top of that, we're seeing really exciting things happening downtown with major employers setting up shop and strong retail investment in the neighborhoods.
This quick article poses a question on hiring real estate agents to Ilyce Glink and Samuel Tamkin, contributors to Real Estate Matters, Tribune Media Services.
Q: I've been trying to sell my house for the past few years and have hired and fired a bunch of agents because none of them was able to find a buyer. What's wrong with all of the agents out there?
A: Because the real estate market was so terrible over the past six years or so, a large number of real estate agents left the profession as sales declined to historically low levels. There just weren't that many buyers out there and the number of sellers far outstripped the number of buyers. It was an extremely imbalanced marketplace, and it still is in many places. That said, there are good real estate agents and bad real estate agents; you need to determine whether your expectations were too high or whether there were real problems with the agents you picked to try to sell your home.
Reasonable and Fair Attorney Fees for Residential Real Estate
Hopefully these real estate interview question and answer sessions helped you better understand a challenge you’re currently facing. If you find that you could use some extra assistance, contact Chang and Carlin, LLP in Chicago today for a FREE No Obligation Legal Consultation
DISCLAIMER: All information on this website are provided for informational purposes only and are not intended to be construed as legal advice. Chang and Carlin, LLP shall not be liable for any errors or inaccuracies contained herein, or any actions taken in reliance thereon.
Tax return theft is an issue that more Americans are facing each tax season. A growing percentage of tax refunds are stolen, so knowing how to keep your personal information safe is important if you want to avoid this frustrating and time-consuming problem. In fact, according to the U.S. Department of the Treasury, refund theft affected over 1.5 million tax returns, with potentially fraudulent tax refunds totaling in excess of $5.2 billion. Furthermore, the IRS could issue $21 billion in tax refunds resulting from identity theft over the next five years.
Fortunately, there is a simple and free way to protect yourself through IRS tax Form 8821, according to a recent CBS Money Watch article.
How Does Form 8821 Keep Your Personal Information Safe?
Tax return theft works like this: An identity thief steals personal information from a taxpayer and files a fraudulent return in his or her name with a different address. The refund from that return is then deposited to a debit card, which is typically untraceable.
“The fraud is possible in part because the I.R.S. currently processes refunds as quickly as possible, and matches up the necessary verifying information later. Most employers, for instance, must provide income information to workers on forms W-2 and 1099 by the end of January. But the employer doesn’t have to file the same information with the federal government until the end of March. So when you file your tax return, the agency doesn’t necessarily have your income information from your employer for immediate comparison.”
The way Form 8821 works is by essentially acting as a canary in a mineshaft, warning of danger. The tax information authorization form allows the government to send copies of all communication between a taxpayer and the IRS to an appointed party.
That way, if the IRS has any correspondence with a refund thief, a copy of their correspondence is sent to the taxpayer. As soon as the taxpayer reads the letter, they know their identity has been compromised.
However, the form will not stop a fraudster from filing a false claim, but if for any reason the IRS finds a problem with the fraudster's return, they will send a notice to the fake address on the tax form and a copy of that letter will also be sent to your home address. This will alert you to any issues, at which time you should contact the IRS immediately to voice your concerns.
Other Ways to Prevent Tax Return Theft
File Early: Thieves hurry to file early so that the fake return is the first one received by the I.R.S. This indicates that filing your return as early as possible may reduce the chances of a successful fake filing.
Adjust Your Withholdings: Adjusting your tax withholdings so that you get a small refund or even owe a little means that your large refund won't be at risk for return fraud.
Protect Your Social Security Numbers: Identity theft often hinges upon acquisition of your SSN, which may be pilfered from places like doctor’s offices and hospitals, schools and elsewhere. Always ask why the number is necessary, whenever it’s requested.
Ask For Help with Tax Return Theft and Other Tax Issues
Dealing with complicated tax and IRS issues can be a daunting and scary process, but you don't have to deal with these issues alone. An experienced tax and IRS lawyer at Chang and Carlin, LLP can help you get the legal representation you need. We can help with IRS Audits, IRS Appeals, Federal Refund Litigation, Tax Court Petitions, Tax Liens, and more.
DISCLAIMER: All information on this website are provided for informational purposes only and are not intended to be construed as legal advice. Chang and Carlin, LLP shall not be liable for any errors or inaccuracies contained herein, or any actions taken in reliance thereon.
In a recent examination of mortgage servicer foreclosure management processes, it has been revealed that the servicers lacked the documents necessary to demonstrate their authority to foreclose. Pursuant to Illinois Mortgage Foreclosure Law (735 ILCS 5/15-1504), the Plaintiff, or the mortgage holder – typically, a bank - needs to prove it is the legal holder of the mortgage. If the bank has no proof of legal standing, the court must dismiss the foreclosure action.
In many cases, the bank may fail to prove ownership of the mortgage, which finally results in the dismissal of the foreclosure action. In a 2012 case, the Appellate Court of Illinois reversed the summary judgment granted in favor of Deutsche Bank, finding that the bank has no “legal standing” in the case. The concept of “legal standing” exists to prevent persons or corporations who have no legal interest in a dispute from bringing suit, which prevents a bank, agency, or person from foreclosing on your home if they did not make you a loan, or mortgage, on your property with your consent. A party's “standing” to foreclose or sue must be determined as of the time the suit is filed. A party either has legal standing at the time the suit is brought or it does not. A foreclosure upon a mortgage may be filed by a mortgagee, i.e., the bank, or by an agent or successor of a mortgagee.
In the 2012 case mentioned, Deutsche Bank filed a mortgage foreclosure action against James L. Gilbert on March 10, 2008. In the foreclosure action, the bank alleged that it was the current holder of the indebtedness. Mr. Gilbert was able to show that at the time Deutsche Bank filed the foreclosure, it did not have legal standing to do so.
Mr. Glibert’s original mortgagee, or mortgage holder, was MERS (Mortgage Electronic Registration Systems, Inc.) as an agent for WMC Mortgage. The mortgage was then sold, or assigned, to Deutsche Bank. While Deutsche Bank argues that the sale of the mortgage happened in November 2005, Deutsche Bank filed to file the correct paperwork (“Assignment of Mortgage’) until after the foreclosure was filed.
The question before the court was whether Deutsche Bank had standing, that is, whether it owned the mortgage, on the date that it filed the foreclosure action. The Appellate Court held that Deutsche Bank has no legal standing and dismissed the foreclosure action. (see Deutsche Bank Nat'l Trust Co. v. Gilbert, 2012 IL App (2d) 120164)
In defending a foreclosure action, identification of the proper affirmative defense(s) and timely assertion are very important. In Deutsche Bank’s case, the defendant Gilbert promptly asserted his defense and got the case dismissed.
About the Author: By Lauren Williams, Legal Blogger for The Law Offices of Michael J. Brennan. Mr. Brennan is a personal injury attorney in the Chicago area.
DISCLAIMER: All information on this website are provided for informational purposes only and are not intended to be construed as legal advice. Chang and Carlin, LLP shall not be liable for any errors or inaccuracies contained herein, or any actions taken in reliance thereon.
Three Senators are pushing legislation, called The Fairness for Struggling Students Act, to change a 2005 Bankruptcy Law regarding student debt. Previously this protection was only given to federal loans in order to protect tax payer’s money, but in 2005 this protection was also applied to all student loans. Regardless of whether the loan was through the government or private lender, even filing for bankruptcy will not eliminate this debt.
Opponents to this law think it is unfair that student loans were given the same protection as government loans despite the fact that many people get students loans through private lenders. Senator Charles Grassley (R-Iowa) sponsored the 2005 Bankruptcy Abuse Prevention and Consumer Protection Act which gave both government and private student loans the same protection from bankruptcy as all federal loans. His office’s reasoning was that only 15% of student loans are private, so extending this protection to private student loans would not affect very many people. However, the people it does affect are hurting very bad. These private loans are not held to the same terms and consumer protections as government loans. Government loans typically have favorable terms, such as low interest rates and income-based repayment. Private student loans often have very high interest rates and do not offer income-based repayment.
Senator Sheldon Whitehouse (D-R.I.), one of the co-sponsors of the Fairness to Struggling Students Act, says,
“"this bill gives us the chance to right that wrong… (it) would restore limited bankruptcy protection and send an important message to lenders and students that they need to be responsible."”
Those who support the bill feel that the possibility of these loans being discharged through bankruptcy will make the private lenders work with those who are struggling more. Right now, there is no incentive for a private lender to lower someone’s interest rate or monthly payments. Even if the person files for bankruptcy, the private lender still has the right to demand payment. If the Act passes, these lenders may offer struggling borrowers an income-based repayment or deferment in order to prevent the borrower from discharging the loan through bankruptcy.
The Consumer Financial Protection Bureau supports the Fairness for Struggling Students Act as well. Director Richard Cordray, says “many borrowers told us their lenders were unable or unwilling to modify or adjust repayment terms even in these tough times.” Mark Kantrowitz, publisher of FinAid.org, believes
“"the prospect of losing loans to bankruptcy discharge will force lender to offer struggling borrowers more options for meaningful financial relief. It will also encourage lenders to adopt more rational credit underwriting criteria that will prevent borrowers from graduating with excessive debt."”
The fact that these loans cannot be discharged in bankruptcy not only affects the student who took out the loan, but often affects the parents. Student loans typically need a cosigner. When the student is no longer able to pay, the cosigner’s credit may be affected as well. Currently, student loan debt in our country is more than $1 trillion. This is more than any other type of consumer debt, including credit card debt.
Clearly, something needs to give. Borrowers of high-cost private loans are offered no sort of debt relief because the lenders have no reason to give them. The passage of the Fairness to Struggling Students Act could offer relief for thousands of Americans.
Trying to solve money problems on your own but don’t know where to begin? There are so many resources out there that finding relevant information and assistance can feel overwhelming.
This post will examine a few recent articles which illuminate how bankruptcy is used as a tool to resolve various financial issues.
Exploring your options is step one on the path to a fresh financial start. Hopefully these articles will give you a few ideas to follow up on!
“A bankruptcy filing creates an automatic stay. This means that the moment the bankruptcy is filed; creditors...including the IRS have to stop collection efforts. If a paycheck is being garnished, it has to stop.”
Dealing with the IRS can be daunting, so it is good to know that you have potent laws on your side. Check out the post for more.
Bankruptcy Without an Attorney
A legal blog’s strong suggestion to seek legal counsel for help with bankruptcy may seek self-serving, but the truth is that having an experienced attorney on your side is much more a necessity than a luxury. According to this article, the US Courts agree:
“It is very important that a bankruptcy case be filed and handled correctly. The rules are very technical, and a misstep may affect a debtor’s rights. For example, a debtor whose case is dismissed for failure to file a required document, such as a credit counseling certificate, may lose the right to file another case or lose protections in a later case, including the benefit of the automatic stay. Bankruptcy has long-term financial and legal consequences – hiring a competent attorney is strongly recommended.” ~US Courts
This post by Attorney Richard Mitchell provides a cautionary message for those who may be considering going it on their own to solve their money problems.
Medical Debt After Filing Chapter 7 Bankruptcy
Medical debt is one of the fastest growing financial issues in America. Health care costs have escalated significantly over the last 20 years, and the aging U.S. population will need more care than ever in the coming years. While Chapter 7 Bankruptcy completely discharges medical debt, you need to wait eight years to file again. This can be a problem:
“…if you are not over your illness and you file for bankruptcy, medical debt will continue to accumulate after your bankruptcy discharge. The same applies if you get sick again after filing and incur new medical debt within the eight year period. Collectors can come after you for the medical debt without impunity during the eight years after receiving a chapter 7 bankruptcy discharge.”
While you’ll want to discuss your options with an attorney, the article suggests Chapter 13 Bankruptcy as a backup plan for dealing with further debt from illness.
“Provided that you are eligible for either Chapter 7 or Chapter 13, and that the debt was not incurred through some fraudulent act or other reason that might bar it from being discharged under Bankruptcy Code section 523(a), the judgment debt can be discharged in bankruptcy just the same as it could have been before the creditor ever sued.”
This is very important, because if you fail to deal with a collections lawsuit, a judgment creditor can record a lien against your home, garnish wages and levy bank accounts. With the assistance of an attorney, bankruptcy can help you deal with this situation.
This article by Attorney Jay S. Fleischman, notes that,
“…your income is important not only to means testing and whether you fall above or below median income, but also in figuring out how much money you have left over at the end of each month for debt payment.”
Calculating your payment/salary correctly can help you determine if you are eligible for Chapter 7 or Chapter 13 Bankruptcy. This post looks at how to do this.
Solve Your Money Problems With Bankruptcy Help
The bankruptcy lawyers at Chang and Carlin, LLP understand that debt issues can happen to anyone, and are sensitive to all situations. We offer reasonable fees for Illinois residents to help meet your legal needs while filing for bankruptcy. Our goal at Chang and Carlin, LLP is to change your financial future.
DISCLAIMER: All information on this website are provided for informational purposes only and are not intended to be construed as legal advice. Chang and Carlin, LLP shall not be liable for any errors or inaccuracies contained herein, or any actions taken in reliance thereon.
If you’re evaluating your financial status and considering bankruptcy, making a list of Chapter 7 Bankruptcy pros and cons can help you mull over your options. In a Chapter 7 Bankruptcy a debtor actually has a number of opportunities, though the advantages may come at a cost, depending on the situation and the skill of your attorney. 
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